Writing and Following a Collection Policy: Why the Policy Matters More Than Any Single File

Jason Hamilton Mikes, JD, MBA
Founder & Managing Shareholder

• Published September 25, 2026
• Reviewed by Jason Hamilton Mikes, JD, MBA, September 26, 2026
• Florida Statutes as of July 1, 2026
• Applies to: Condominiums · HOAs · Cooperatives

Collection is the one association function where doing the same thing every time matters more than doing the clever thing once. The statutes set a notice sequence the association must follow before it can charge attorney fees, record a lien or foreclose. Everything else, when the file goes to counsel, whether a payment plan is offered, what settlement authority exists, is the board's to decide. A written policy makes those decisions once, in the calm, and applies them to everyone.

Why a written policy beats good judgment

Every association eventually faces an owner who says the board treated them differently. Sometimes that is an excuse and sometimes it is true. A selective enforcement defense does not require the owner to show bad motive; it requires showing that the association enforced against them and not against others in similar circumstances.

A written collection policy answers that in one sentence: here is the policy, here is the date the board adopted it, and here is the file on every delinquent account showing the same steps on the same schedule. Without a policy, the association is defending a series of individual decisions made by different boards over several years, and the differences between them are the owner's case.

A policy also protects directors from each other. Collection is where boards develop factions, because directors know the owners involved. A policy converts an uncomfortable personal decision into an administrative step that management performs without a vote.

Adopt the policy as a board rule at a properly noticed meeting, record it in the minutes, and give it to owners. Review it annually. Where the policy needs to change because the statute changed, change it promptly, since a policy that contradicts the current statute is worse than no policy at all.

The statutory notice sequence

The shape is the same in all three chapters, and the deadlines are the same. The differences are in the delivery requirements and the statutory form.

Three practical rules follow. First, use the statutory form exactly. The Legislature wrote the words, and a redrafted notice invites an argument that the association never gave the notice the statute requires. Second, calendar the periods from the date of mailing, not the date of the board meeting. Third, keep the proof of mailing with the account file. Our chapter guide to condominium collection notices walks through each form in detail.

Late fees, interest and how payments apply

Interest accrues on a delinquent assessment at the rate stated in the governing documents, or at 18 percent per year if the documents state no rate, in all three chapters. The association may also charge an administrative late fee if the documents authorize one, not exceeding the greater of $25 or 5 percent of each delinquent instalment.

The application of payments is statutory and is the provision boards most often get wrong. Any payment received is applied first to interest accrued, then to any administrative late fee, then to costs and reasonable attorney fees incurred in collection, and then to the delinquent assessment. This order applies even if the owner writes "for assessments only" on the check and even if the association would prefer to apply it differently.

Two consequences matter. An owner who pays the assessment amount but not the fees and interest remains delinquent, because the payment was applied to the older charges first. And an association that quietly applies payments in a different order for a sympathetic owner has departed from the statute and from its own policy in the same act.

Say in the policy what the association charges, what authorizes it, and when it accrues. If your documents do not authorize an administrative late fee, the association cannot charge one, and that is worth confirming rather than assuming.

When the file goes to counsel

The referral trigger should be a date and a dollar figure, not a discussion. A typical policy states that an account is referred when it reaches a stated number of days past due or a stated balance, whichever comes first, unless a payment plan in good standing is in place.

1. Assessment due. Late fee and interest begin to accrue per the documents.
2. Management sends a courtesy reminder, which is not a statutory notice and should not pretend to be one.
3. The 30-day notice of late assessment is sent in the statutory form. Attorney fees may not be demanded before this.
4. If unpaid, the file is referred to counsel on the date the policy specifies.
5. Counsel sends the 45-day notice of intent to record a claim of lien.
6. If unpaid, the claim of lien is recorded.
7. Counsel sends the 45-day notice of intent to foreclose.
8. The board decides whether to authorize foreclosure, considering the equity position, the mortgage, any bankruptcy, and whether the unit is occupied or rented.

That last step is a board decision on every file and should stay one. Whether to foreclose depends on facts the policy cannot anticipate. Everything before it should run automatically. Our guide to the lien and foreclosure process explains what happens after the board authorizes suit, including the association's position behind a first mortgage.

Payment plans and who may approve them

No chapter requires an association to offer a payment plan. Boards offer them because a plan that is paid is better than a lien that is not. The policy should decide the terms in advance so that management can offer a standard plan without a board vote, and only unusual requests come to the board.

• Who may approve. Management for a standard plan within stated parameters; the board for anything outside them; counsel once the file has been referred.
• Maximum term. State it. Twelve months is common. An open-ended plan is a deferral, not a plan.
• Down payment. State a minimum, and state that the plan does not stop interest or fees unless the board says it does.
• Current charges. The plan must cover the arrears and the owner must stay current on new assessments. Most plan defaults are on the current charges, not the arrears.
• Writing. Every plan in writing, signed, stating the balance, the instalments, the dates, and the consequence of default.
• Default. One missed payment returns the account to the collection track at the step it had reached, with no new notice sequence required unless the statute requires one.
• No waiver. The agreement should state that accepting instalments does not waive the association's lien rights or its right to fees.

Do not let a plan be negotiated in a hallway. The value of the plan is that it is documented and uniform, and a plan given on different terms to two owners in the same position is exactly the inconsistency the policy exists to prevent. Our chapter guide on payment plans in a condominium covers the drafting points.

Suspension of use rights and voting rights

Suspension is a collection tool, and it is available in all three chapters, but the thresholds differ and the mechanics are exacting.

The condominium voting-rights suspension carries a dollar threshold the HOA and cooperative provisions do not, and boards that manage both a condominium and an HOA portfolio mix the two up constantly. A suspended voting interest is not counted for quorum or election purposes, which is why suspensions have to be tracked precisely against the roster before any vote.

Fines are a separate subject and should not be run through the collection policy, because the rules diverge sharply. A condominium or cooperative fine may not exceed $100 per violation or $1,000 in the aggregate and may never become a lien. In an HOA the caps are the same figures but the governing documents may provide otherwise, and only a fine of less than $1,000 may not become a lien. Both require 14 days' written notice and a hearing before a committee of at least three members appointed by the board who are not officers, directors or employees or their relatives. See our guide to fines, hearings and suspensions.

Settlement authority and writing debt off

Counsel will eventually call with a settlement offer, usually while the board is between meetings. Decide in advance what may be accepted without a meeting.

A workable structure gives counsel authority to accept payment in full including fees and interest, gives the board president or treasurer authority to accept a compromise within a stated percentage of the balance, and reserves anything larger for the board. Write the delegation into the policy and record it in the minutes, so the person exercising it has demonstrable authority.

Compromising an assessment debt deserves care. Assessments are the funding mechanism for common expenses, and forgiving one owner's share shifts it to everyone else. There are situations where a compromise is plainly right, an abandoned unit with a first mortgage far exceeding value, for example, and the analysis is financial rather than moral. Ask counsel what the association would actually recover if it pursued the file to judgment, and compare that to the offer.

Where the board writes an amount off, record the decision and the reason in the minutes. Auditors will ask, the accountant will need it for the allowance for doubtful accounts, and the entry is the answer to the next owner who asks why their neighbor paid less.

Consistency is the defense

Two associations can have the same policy and very different exposure. The difference is whether the policy is followed.

• Run the same steps on the same schedule for every account, including the director's account and the manager's friend's account.
• Keep an account-level file showing the date of each notice, the method of delivery, and the proof.
• Report delinquencies to the board at every meeting as a list with balances and status, without narrative about individuals.
• Do not discuss individual accounts in the open portion of a meeting beyond what the agenda requires; identify accounts by unit or parcel number.
• Document any departure from the policy and the reason at the time, not later. A documented exception is defensible. An undocumented one is evidence.
• Revisit the policy annually against the statute and against what the association actually did.

When an owner raises selective enforcement, the association's answer should be a binder rather than a memory. Boards that keep that binder rarely have to use it, which is the point. The same discipline underlies our approach to covenant enforcement generally.

Contact Hamilton Mikes

Hamilton Mikes drafts and updates collection policies for condominium, HOA and cooperative boards in Southwest Florida, handles the statutory notice sequence, and takes files through lien and foreclosure when the board authorizes it. Call 239-594-7227 or visit our Assessment Collection page.